Health Reform WK-EDGE Medicaid payment rate changes increased substance use disorder service availability
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Wednesday, February 12, 2020

Medicaid payment rate changes increased substance use disorder service availability

By Gregory Kane, J.D., M.B.A.

GAO report showed state’s increases to Medicaid payment rates for substance use disorder services increased the availability of those services.

There is a positive correlation between increases in states’ Medicaid payment rates for substance use disorder services and the availability of those services, according to a Government Accountability Office (GAO) report. Factors such as Medicaid program requirements also played a role in determining provider participation (GAO Report, GAO-20-260, January 30, 2020).

Background. Substance Use Disorders (SUDs) affected nearly 20 million adults in 2018 with Medicaid being the largest source of federal funding for services that treat SUDs. A low percentage of SUD providers participate in Medicaid in some states, however, and rate increases have been suggested for increasing participation. The SUPPORT for Patients and Communities Act included a provision for examining how SUDs services are reimbursed. To that end, the GAO produced a report describing the extent to which states made changes to Medicaid payment rates for SUD services, characteristics of those changes, and what was known about the effect of those changes. The GAO requested and received information from Medicaid officials in all 50 states and the District of Columbia on rate changes from 2014 to 2019, with an eye on fee-for-services (FFS) programs specifically.

Findings. Medicaid programs in 42 states reported increasing the FFS rate paid to providers for at least one SUD service with 12 states—including 11 of the 42 states with increases—reporting decreases in the FFS rate for at least one SUD service. Nearly all of the 42 states with rate increases reported changes to rates for outpatient SUD services and close to half reported increases for inpatient, residential, or MAT services. The GAO chose a non-generalizable sample of six states that implemented increases to FFS payment rates for closer examination. All six states reported increases for outpatient SUD services with larger rate changes resulting in greater effects on SUD service availability. In selected states, Medicaid officials also identified program requirements—important to ensure quality of care and proper payments—were a factor in the availability of SUD services. State officials also noted that budgetary constraints limited the extent to which they were able to increase rates.

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